State senator aided workers’ comp fraud worth millions — FBI

State Sen. Ronald Calderon accepted bribes from a Southern California hospital executive who ran an alleged workers’ compensation scheme that brought the executive tens of millions of dollars, according to a sealed FBI affidavit obtained by Al Jazeera’s Investigative Unit.

In exchange for payments to family members, Calderon, a Democrat who represents a suburban district here, protected the interests in Sacramento of Michael Drobot, who ran a busy spinal surgery clinic in Long Beach, Calif., the affidavit says. The document says Calderon ensured that changes to state law would not injure Drobot’s lucrative business of providing spinal fusion surgery, which joins two or more vertebrae.

The California State Compensation Insurance Fund, a quasi-governmental organization that makes payments on workers’ compensation claims, filed racketeering charges against Drobot and his medical companies earlier this year. The complaint alleges that he received $161 million through inflated surgery room and spinal implant reimbursement fees in what the state calls “multiple fraudulent schemes.” The allegations are contained in a lawsuit filed in U.S. District Court, Santa Ana, Calif.

Until now, Calderon’s alleged behind-the-scenes role in the workers’ compensation payment controversy has never been revealed…

Drobot, who lives in a $6 million mansion on the Pacific Ocean in the Corona del Mar section of Newport Beach, Calif., formerly owned Pacific Hospital of Long Beach, a 184-bed facility. He allegedly overbilled the State Compensation Insurance Fund for tens of millions of dollars through an insurance claims process known as “upcoding,” which results in the submission of charges substantially higher than set rates, according to a racketeering lawsuit the State Compensation Insurance Fund filed against Drobot and his companies in Santa Ana.

Through upcoding, Drobot billed excessive amounts for Pacific Hospital and then entered into negotiated settlements with state officials as a matter of practice, according to the FBI affidavit…

Drobot has been accused of creating a shell company to artificially inflate the price of spinal implants. Those operations were reimbursed separately under California law and allowed him to cheat state taxpayers for millions more, according to the lawsuit.

“Of course I’m milking the system,” Drobot allegedly told a state investigator, according to the FBI affidavit.

The medical-industrial complex system in the United States is easily as corrupt as their counterparts in the military-industrial complex. And they’ve learned their lessons well. Owning politicians is key to profit-taking, central to inflating profits, beyond any value delivered.

RTFA for the details. It is a pleasure to see Al Jazeera expand their role in American news-gathering to the quality accepted as their standard in the rest of the world. While the ignorant and timorous among us stand back from old-fashioned journalism standards in fear of foreign ownership, serious news junkies enjoy AJAM on satellite/cable television and online.

Adding quality investigative journalism to their mix of quality, broad reporting increases the likelihood I’ll devote more time to Al Jazeera. I just wish they’d hurry up and invest in conversion of their current broadcast equipment to HDTV. 🙂